Defining miscellaneous deductions

Miscellaneous deductions are unique deductions your organization needs to deduct from employee pay, or apply to the company.

Note: If this deduction uses a required, company match, or after-tax limit deduction, you must define those elements before defining this deduction.

See Defining deduction required codes, Defining company match deduction codes, and Defining linked after-tax limit deductions.

Define miscellaneous deductions

  1. Access Deduction (PR05.1).
  2. Define deduction code and description. Use these guidelines to specify the field values:
    Deduction

    The code that represents the deduction.

    (Description)

    The description of the deduction.

    Payment Description

    The description of this deduction that prints on payments.

    Note: If you assign a deduction class to this deduction code, then the payment description on the deduction class overrides this payment description.
  3. Select how you want Payroll to calculate the deduction in the Calculation Type field.
    If the deduction is a Select
    Percent of employee gross pay Percent.
    Flat amount to be deducted Flat Amount.
    Flat amount multiplied by the number of hours worked Amount per Hour.
    Flat amount multiplied by the number of days worked Amount per Day.
    Percent of employee base pay, as defined on Employee (HR11.1), multiplied by the number of hours worked Percent of Base per Hour.
    Percent of employee disposable wages (U.S.) or net wages (Canada) Percent of Disposable/Net Wages.
    Flat amount plus a percent of employee gross pay Flat Amount plus a Percent of Gross Pay.
    Percent of employee disposable wages (U.S.) or net wages (Canada) plus a minimum flat amount. Percent of Disposable/Net Wages with Minimum Flat Amount.
    Percent of available wages (Canada) Percent of Available Wages.
    User defined calculation User Exit.
  4. Define pay information. Use these guidelines to specify the field values:
    Pay Class

    Determines if you want the application to calculate the deduction on pay associated with a specific pay class.

    Currency

    Determines the currency that you want Payroll to use to calculate the deduction.

    If the company uses one currency, then the company currency is used as default to this field.

    If the company uses multiple currencies, the process level currency is used as default to this field.

    Note: The employee currency and deduction currency must match for you to be able to assign the deduction to the employee.
    Note: The calculation type that you selected determines if the Amount or Percent field is an amount or a percent.
  5. Type the flat amount or percent you want to deduct in the Amount or Percent field.
  6. If you selected Flat Amount plus a Percent of Gross Pay or Percent of Disposable/Net Wages with Minimum Flat Amount in the Calculation type field, then specify the additional percent or minimum amount in the Addl or Minimum Amt, Pct field.
  7. Select who pays for this deduction.
    If the deduction is Select
    Added to the employee net pay Add-to-Net.
    Deducted from employee pay Employee Paid.
    Accrued by the company Company Paid.
  8. If you want to include this deduction in a deduction class, then select the deduction class in the Deduction Class field.
  9. Define deduction processing options. Use these guidelines to specify the field values:
    Priority

    The number that represents the order in which Payroll takes the deduction within the category of other deductions.

    Arrears

    Select what you want Payroll to do if there is not enough employee pay to cover the deduction.

    Cycles

    Select the deduction cycles in which Payroll takes the deduction.

    Note: You can override the value in these Cycles fields for individual employees when you assign the deduction to employees.
    Excl From Garnishment (Exclude from Garnishment)

    Determines whether or not you want to subtract the deduction from employee pay before calculating disposable income for garnishment purposes. Disposable income equals gross pay minus taxes and other deductions.

    Note: Do not use this field for tax, company-paid, or add-to-net deductions.
  10. If your organization matches a portion of this deduction, then select the company match deduction in the Matched Deduction field. See Defining company match deduction codes.
  11. If you want Payroll to automatically assign this deduction to certain employees, select the deduction required code in the Required Code field. See Defining deduction required codes.
    Note: When calculating earnings and deductions, Payroll verifies the effective date to ensure that the deduction must be taken.
  12. Specify the beginning date or the date range that the deduction is in effect in the Effective Date fields.
  13. If you want to override the accounts defined at the HR company or process level, then select accounts for the deduction in the Accrual Account and Expense Account fields.
  14. If you use the Project Accounting application and this is a company paid deduction, then you must define the activity options. Use these guidelines to specify the field values:
    Activity

    The activity to which Payroll associates any deduction expenses.

    Account Category

    The activity category to which Payroll associates any deduction expenses.

  15. Define deduction limits. Use these guidelines to specify the field values:
    Monthly Limit

    The maximum amount Payroll can deduct for this deduction in one month.

    Payment Limit

    The maximum amount Payroll can deduct for this deduction in one payment.

  16. If this is a tax deduction, then you must define the tax information. Use these guidelines to specify the field values:
    Country Code

    The country code you want to use to calculate the deduction.

    Tax Status

    Determines the tax status of the deduction.

    Self Adjust Tax

    Determines whether or not Payroll verifies the year-to-date taxable wages multiplied by the rate to determine the year-to-date tax and makes necessary adjustments. The default setting is Yes.

    Note: If the rate changes in mid-year and this field is set to Yes or if you change this field from No to Yes in mid year, then Payroll makes adjustments to the whole year-to-date, which results in large adjustment amounts.
  17. If you use the Accounts Payable application, then you must define the AP options. Use these guidelines to specify the field values:
    Update Accounts Payable

    Select whether or not to create invoices for payroll-related payables when you close Payroll.

    Create Invoice by Employee

    Select whether or not to create AP invoices by employee.

    See your Accounts Payable User Guide.

    Vendor

    The vendor that you want to use to create accounts payable invoices for this deduction.

    Note: Click Addl Vendors to define vendors and process level combinations for this deduction.
    Remit To

    Remit To identifies a vendor location where payments are to be remitted. This field populates the Remit-To-Code on AP invoice records (AP20.1) via the AP interface.

    If you use this field, then the payment address comes from Vendor Location (AP10.2). If this field is left blank, then the payment address defaults from Vendor (AP10.1).

    Remit To can be defined for:

    • An individual garnishment on US Employee Garnishment (PR26.1) or Canada Employee Garnishment (PR47.1).

    • An individual process level override within deduction on Additional Vendors (PR05.3).

    • An entire deduction on Deduction (PR05.1).

      If you use this field, then you must also select a vendor in the Vendor field.

Related reports and inquiries

To Use
List deductions Deduction Listing (PR205)
Related topics